The story of economic reforms is well documented over the years and there have been several tomes written to explain the genesis of these measures and their impact. In general, one can say reforms have taken us steps ahead from where we were when the crisis struck. This was the time when Yashwant Sinha was at the helm; and his insights from within on how we went in for this package and the various controversies that reared their heads in the process are presented in the book, The Future of Indian Economy: Past Reforms and Challenges Ahead.
Yashwant Sinha and Vinay K Srivastava have put together some very good articles from various well-known experts on the subject, including C Rangarajan, UK Sinha, Mani Shankar Aiyar, Sanjaya Baru, YK Alagh and Rajat Kathuria, which provide in-depth details on not just how the economy has fared, but also their view on the way forward. Almost every aspect of reforms, ranging from foreign trade and balance of payments to industrial growth, finance and fiscal issues has been dealt with. In typical academic style, the pros and cons of every measure have been presented, making the book a very good documentation of economic reforms in India that cleverly traverses various political regimes in power.
My favourite is the really remarkable article written by Yashwant Sinha, where he provides a very caustic view of what reforms have not done. There has always been a tendency for critics to be unhappy with the pace of reforms and invariably criticism is levelled at what has not been done. Issues like disinvestment or privatisation and FDI in retail are the usual grievances. The elitist view is that reforms have brought in the goodies, but Sinha avers that the common man does not get too excited by the term ‘reforms’, as the benefits have not quite percolated to him. He explains why this is so, and urges the government to address this with urgency. Let us look at some of these interesting questions posed by him. First, at the end of the day, the citizen expects basic amenities to be available to her. Has this happened? Second, he is very open when talking about FDI and says our overindulgence with such investment is not acceptable.
While we always keep arguing for more FDI, the consensus in the country is more important and we can’t just be getting in these investors without looking at domestic concerns. More importantly, he says as our democracy and parliamentary processes are an accepted part of our lives, there is no point in harping on them. This is very pertinent because, often as critics, we tend to talk of an ideal situation that means getting rid of these systems, which is not possible and also irrational. He points out that politics is a part of this decision-making process and we can’t sit in isolation and wish it away. This makes a lot of sense and actually holds true in any country. He, hence, provides a saner perspective of what we need to keep in mind without getting impatient about reforms.
UK Sinha provides a brilliant and comprehensive view on the capital market and its evolution with reforms, which becomes a sort of almanac for the reader. This is one sector that has been a scoring point not just from the point of view of the Sensex, but also in placing the Indian market high on the radar of FPIs. Mani Shankar Aiyar writes on his pet theme, panchayati raj, with his usual flair, while C Rangarajan provides a practical view on the financial sector, with an emphasis on banking. There are chapters on the budgetary process, including the FRBM and its effectiveness by NK Singh, DK Srivastava and SC Pandey. YK Alagh has an interesting piece, where he analyses the state of agriculture in the context of fiscal reforms.
There is a section on PSEs and disinvestment, and an essay not to be missed here is by Rajat Kathuria on competition in the provision of infrastructure, where he dissects the progress made in individual sectors such as roads, railways, etc. There are diverse views also on disinvestment by different authors, which add to the knowledge disseminated in this collection.
Yashwant Sinha and Vinay K Srivastava have done a remarkable job in getting these experts to write on their areas of specialisation and the reader is able to get an entire buffet of knowledge. As the essays are on different subjects, they can be read independently and are not linked. This is definitely one book that needs to be on the shelf of every student, practicing economist, as well as library.
Madan Sabnavis is chief economist, CARE Ratings